Tensions had been brewing for several weeks over military plans to take possession of a government-owned parcel of land home to thousands of people in the coastal city of Cox's Bazar.
Local resident Mohammad Belal Uddin told AFP that the matter came to a head when troops at the base detained a lawyer advocating for residents facing eviction.
"People learned that the lawyer had been picked up," he said. "The news spread like wildfire, and people rushed to the base to rescue him."
Belal said security forces opened fire to disperse the crowd.
Officials at the Cox's Bazar district hospital confirmed the death of one man from a head injury.
Another six people were treated for injuries there, police officer Saiful Islam, told AFP.
Around 2,000 people had gathered near the base in the lead-up to the incident, police officer Mohammad Rahmatullah told AFP.
A statement from the military's public relations office said four base personnel were also injured in the clash.
It claimed troops had only fired blank rounds to disperse the crowd and that the dead man was not killed by gunfire.
Armed forces spokeswoman Ayesha Siddique said the incident was an attack by "miscreants" on the base.
"The Bangladesh Air Force took necessary action," she added.
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